Ecoservices: Balancing farm production and commerce

EcoCommerce 101, The Emergence of an Invisible Hand to Sustain the Bio-Economy, a new book by Tim Gieseke, is "the culmination of 20 years of seeking solutions to the ecological and economical balance needed within agriculture." The second Green Revolution, he notes, must embrace natural capital values and the values associated with ecoservices, to the extent that it improves the capacity of both on-farm and off-farm resources.

Dec 29, 2010

Over the last two decades, Tim Gieseke has worked to understand the ecological and economical balance needed within agriculture.

Many of the ideas and conclusions from that quest are contained in his new book, EcoCommerce 101, The Emergence of an Invisible Hand to Sustain the Bio-Economy, Bascom Hill Publishing Group, $37.95)

The book, Gieseke says, is “a culmination of 20 years of seeking solutions, five years of focusing on a solution, and a year to appreciate the depth of its potential.”

After earning his masters degree, he worked with local, state, and national conservation policy issues and their relationship to production agriculture. In the early 1990s, he began farming in south central Minnesota, where he integrated his conservation experience within an agro-economic system that was at a 30-year low point and received firsthand experience in the dependency that agriculture has on federal farm policy.

He founded Ag Resource Strategies LLC as a vehicle to assist in the development of an outcome-based resource management process for agriculture, agribusiness, and agri-industry, as well as to align those activities with the governmental and non-profit organizations that provide the necessary support for effective resource management to occur.

“Imagine a farmer sitting down to evaluate his production plan for the year,” Gieseke says. “He considers the price of traditional agricultural commodities and how to produce them in certain quantities.

“Now, add a value for soil conditioning, water quality, habitat, and carbon sequestration indices. For example, what if a water quality score of 80 meets the criteria for multiple beneficiaries? It may meet the objectives of a USDA incentive program, and/or an EPA Total Maximum Daily Load regulatory assurance requirement.

“It may also provide market access via Walmart’s sustainability index, generate a tax rebate from the local watershed district, or become an eligibility requirement to engage in a water quality trading program for a waste water treatment plant.

Farm's portfolio of ecoservices

“A compilation of these resource indices becomes the farm’s ecoservice portfolio that can be recalculated yearly.”

Providing ecoservices and increasing the natural-capital capacity is an investment in the bio-economy infrastructure, Gieseke says, and is an investment that create immediate wealth and renewable wealth.

The second Green Revolution, he notes, must embrace natural capital values and the values associated with ecoservices, to the extent that it improves the capacity of both on-farm and off-farm resources.

“Finding the path toward the next Green Revolution is in our self-interests as well.”

While once it was just the government that was willing to pay for ecoservices, consumers and private business sectors have begun to show support, Gieseke says.

“With the retail giant Walmart and others following suit, or participating in their Sustainability Index effort, the tipping point for EcoCommerce may be near. At that point, land managers become the ecoservice suppliers to the nation and world, rather than confined to being the conservation customer of federal and state governments.”

“We now freely talk about water quality trading, carbon credits, cap and trade, wildlife habitat, ecotourism, and social aspects of landscapes, although there is not a common structure as to how we view the values of these components,” notes Jerry L. Hatfield, director, USDA/ARS, National Laboratory for Agriculture and the Environment, Ames, Iowa, in the book’s foreword.

“(This book) provides such a framework, for not only how we value these ecosystem services, but the process through which we quantify this value…

“More and more we are going to be examining the linkages among the monetary value of ecosystems. This book focuses on agricultural systems and their value, which brings the concepts into play in an area in which ecosystem services need to be understood from an economic perspective…e.g., what is the value of soil, what is the value of clean water?

“(While this book) will be a valuable asset to anyone who wants to understand how this economy will emerge… (its) largest value is for policymakers and traders who will be the driving force in the development of policies and practices associated with ecosystem services.

Sustainability and economic value

“If we are to continue to serve the world in which we are entrusted to be good stewards,” Hatfield writes, “then we will have to understand all of the dimensions of sustainable systems, which only come through understanding the economic value.”

Many readers will not be convinced that such a system could ever be implemented, says Gieseke.

“Amazingly, though, as long as someone or some entity deems it to be in their self interest, however narrow or broad, EcoCommerce can emerge and commence….The desire to place economic value on a defined level of sustainability is the impetus for EcoCommerce, the same beginning for all emerging markets.”

Agriculture is a unique industry, he notes, in that it provides 90 percent of the food for the world’s people and is the most intensively-managed ecosystem.

What is being lost, he says, is the production capacity of the natural capital of soil.

“This soil ‘factory’ is being gradually depleted under the production system that provides food for six billion people. A scenario that could put further stress on these ‘food factories’ would be if cellulosic material can be readily converted to liquid fuels or other energy sources. Then the ‘invisible hand’ of the economy will encourage resource mangers to provide both food and fuel stocks to a population that is estimated to be nine billion by 2050.” More than 90 percent of all the crops and livestock consumed, as well as livestock feed, is produced by agro-ecosystems, Gieseke notes.

“Unlike other ecosystems, agro-ecosystems do not occur naturally — they are created and maintained by humans … Agro-ecosystems provide, on average, 24 percent more food per person today than they did in 1961. But by 2020, they will have to supply food for an estimated 1.7 billion more people.

“In essence, the soil factory will have to provide greater production output, while under a management system that will remove additional organic material. Being a finite system it is highly improbable that this type of an economy can maintain the capacity of the natural capital.”